Gold was thumped by the world's reserve currencies this week with most of the damage wrought by the yen. The Japanese currency rose 3.7 percent against bullion through Thursday. Gold lost 2.8 percent versus the euro, 2.5 percent against the Swiss franc and 2.0 percent in sterling.

For the week ending Thursday, these were the key U.S. dollar indicators:

• The London morning gold fix fell 2.0 percent to $1,187 and averaged $1,191; COMEX spot settlements averaged $1,190, finishing at $1,196; average daily COMEX gold volume spiked 28.2 percent to 170,147 contracts; average open interest fell 1.3 percent to 567,272 contracts; COMEX gold warehouse stocks increased by 137,239 ounces; the 11.115 million-ounce stockpile now covers 19.9 percent of open interest.

• Three-month London gold lease rates remained flat.

• Bullion assets of the SPDR Gold Shares Trust (NYSE Arca: GLD) fell 6.1 tonnes (0.5 percent) to 1,308.1 tonnes.

• A 2.2 percent loss suffered by the Market Vectors Junior Gold Miners ETF (NYSE Arca: GDXJ) edged out a 2.0 percent decline in the Market Vectors Gold Miners ETF (NYSE Arca: GDX), which tracks established producers; meanwhile, the S&P 500 Composite inched 0.3 percent lower, wrenching its correlation to GDX up 13 percentage points to 57 percent; the blue-chip benchmark's coefficient vs. gold zoomed 29 points higher to 27 percent.

• NYMEX WTI crude oil prices jumped 3.5 percent to $79.30, averaging $77.17 a barrel; the gold/oil multiple slipped to 15.1x.

• Three-month Treasury bill yields remain flat at 15 basis points (0.15 percent); but a decline in Libor lowered the TED spread - the rate premium demanded in interbank lending - to 35 basis points.

• A deep 23 basis point discount to one-year Treasury rates developed in the COMEX gold futures term structure.

• Long bond yields fell another 2 basis points to 3.95 percent, flattening the yield curve to 380 basis points.

• The euro appreciated by 0.8 percent against the U.S. dollar; cross rates averaged $1.2889 and finished at $1.2829.

• Disinflation's grip loosened a bit as the one-year monetary inflation rate nosed to -1.6 percent from -1.7 percent; at today's rate, the real return (i.e., adjusted for monetary inflation) on three-month Treasury bills is 216 basis points.

Monetary Inflation